Lee Jae-yong's 'Unfair Merger and Accounting Fraud' First Trial Verdict Postponed to Next Month 5 (Comprehensive)

Change from the 26th
Prosecution and Lee submit additional briefs even as sentencing nears

The sentencing trial for Samsung Electronics Chairman Lee Jae-yong's case involving unfair merger and accounting fraud, originally scheduled for the 26th of this month, has been postponed to early next month.

According to the legal community on the 22nd, the Seoul Central District Court Criminal Division 25-2 (Presiding Judges Park Jeong-je, Ji Gwi-yeon, Park Jeong-gil) changed Chairman Lee's sentencing date from the 26th to the 5th of next month.

Lee Jae-yong, Chairman of Samsung Electronics. Photo by Heo Young-han younghan@

The court reportedly postponed the sentencing date inevitably because it needed time to review additional written opinions submitted by both the prosecution and Chairman Lee's side after the closing arguments. It is known that both the prosecution and Chairman Lee's side submitted written opinions to the court on the same day.

Chairman Lee and others were brought to trial in September 2020 on charges of violating the Capital Markets Act and breach of fiduciary duty related to the merger process between Samsung C&T and Cheil Industries.

Samsung C&T and Cheil Industries resolved a merger in May 2015 through their boards of directors, exchanging one share of Cheil Industries for approximately three shares of Samsung C&T. Chairman Lee (then Vice Chairman), who held a 23.2% stake in Cheil Industries, secured a stable stake in the integrated holding company Samsung C&T after the merger, thereby strengthening his control over the group.

The prosecution judged that during this process, various fraudulent transactions were conducted under the leadership of the group’s strategic office, the Future Strategy Office, including spreading false information, concealing important information, announcing false favorable news, purchasing shares by major shareholders, illegal lobbying to secure voting rights of the National Pension Service, and market manipulation through concentrated repurchase of treasury stocks, all aimed at inflating Cheil Industries’ stock price and lowering Samsung C&T’s stock price.

As a result, Samsung C&T’s corporate value was not properly evaluated, causing losses to investors, according to the prosecution. The prosecution identified Samsung C&T directors as the main actors of breach of fiduciary duty and named Chairman Lee as the instigator or accomplice. Chairman Lee and others are also accused of accounting fraud related to Samsung BioLogics, a subsidiary of Cheil Industries.

In the closing arguments on November 17 last year, the prosecution requested a sentence of five years imprisonment and a fine of 500 million won for Chairman Lee.

This content was produced with the assistance of AI translation services.